What Is a Cultural Transformation? Here’s Why It Matters for Small Businesses

Small and medium businesses (SMBs) are taking a hard look at company culture, work-from-home policies, and their use of technology, as COVID restrictions ease and workplaces open back up.

Navigating so much change — especially all at once — isn’t easy. But we can learn from those who’ve done the work before us. Let’s take a look at three actionable steps to help SMBs navigate transformation, using examples from Greg Howell, president of Flexo Concepts, who’s driving cultural and digital transformation with his partner Kevin McLaughlin at their manufacturing business.

What’s a cultural transformation?

First, let’s define two key terms:

1. A cultural transformation is a shift inside of an organization that aligns its culture to its values. Successful cultural transformations lead to more employees feeling like they belong, and can invest themselves in the long-term success of the organization. This often requires changing the hearts, minds, and skill sets of people inside of the organization. As we’ll see, that change can come from anywhere — top-down, bottom-up, or spurred on by multiple voices spread throughout a company.

2. A digital transformation leverages technology to create or modify business processes, culture, and customer experiences to meet changing business and market requirements. Simply put, digital transformation is the reimagining of business in the digital age.

Cultural and digital transformations often go hand in hand. When it comes to things like work from home and hybrid office policies, the two are intertwined. Many SMBs are now tackling both transformations at once, applying learnings from a year-plus of remote work to evolve their cultures and workflows to support individual employees and company-wide goals.

Practical keys to drive transformation

How can an SMB evolve, culturally and digitally? Let’s look at three keys that drove Flexo’s cultural transformation — a major shift that challenged Howell’s own long-held beliefs in what critical concepts like company loyalty and employee happiness should look like.

1. Write it down — codify your culture

Back in 2016, Howell attended his first Dreamforce in San Francisco. During an executive breakfast session, he listened to the head of SalesforceIQ (now Salesforce Essentials) talk about codifying your culture. “He made the point that you really haven’t defined your culture if you can’t write it down,” Howell said. “I came back from Dreamforce and my partner and I set out with our management team to put down in words both what we thought Flexo was, and what we aspired it to be.”

Flexo landed on four themes for their company: people, trust, accountability, and performance. The themes became Flexo’s four core values, and they, in turn, informed two key tenets of the company culture: the type of work environment they wanted to have and the type of people they wanted to work with.

“We felt like if we really focused on people and relationships and trust and values, then we could create great experiences amongst ourselves and deliver great experiences to our customers and vendors,” Howell said.

2. Ensure employee alignment

There’s an important backstory that informed Howell’s lightbulb moment at that Dreamforce breakfast. Increasingly, Flexo had come face-to-face with a new generation of workers looking for something different from what Howell and his partner had been raised to expect from an employer. The biggest difference? A shift in employees deciding benefits like more time off and a better workplace environment was as important as benefits connected to compensation.

As Flexo delved into their cultural transformation: codifying their culture and defining company values, they followed their own advice and these defined values begat a guide for hiring and developing talent.  “We learned a lot from that exercise, and one of those things was that some employees didn’t personify these values.” Howell said. Over the next few years, those folks gradually separated from the company and now Flexo’s culture and values are a key part of the hiring process.

“When we interview, we’ll put this document in front of candidates, with our vision, mission, purpose, and cultural values laid out,” he said. “We want to be honest about what we need from employees and what it is like to work here, and be sure they are on board and can get behind it.”

The transformation is paying off in spades. Flexo Concepts earned it’s second Great Place to Work certification in 2021.

3. Get the right tools: Digital transformation

Codifying your culture and bringing the right people into the fold are obviously important parts of transforming your SMB for the better. But you also have to put your company values into day-to-day practice. Giving your employees the right tools is a big piece of that puzzle. As Flexo — like so many other SMBs — learned during the pandemic, digital and cultural transformations go hand-in-hand.

Howell and McLaughlin were in the Bay Area for the Great Place to Work conference just as COVID-19 reached official global pandemic and U.S. national emergency status. “We came back and made the decision on a Friday that our entire office staff would go remote the next Monday,” he said. Thanks to the work Flexo had already done on digital transformation, all they had to do to prepare was make sure employees had Google Chrome on their computers. Critical business data and workflows were already in the cloud, easily accessible by employees from anywhere.

Trust your company culture to guide you

Flexo was well-positioned to handle the pandemic in large part because they’d done the work to codify their company values — people, trust, accountability, and performance — and because they had the tools in place to put those values into action from virtually anywhere. As we embrace the next normal of workplace life, that sweat equity will continue to support the culture Flexo has also worked so hard to define and grow.

“It’s something we’re really passionate about,” Howell explained. “The idea that if you need someone to look over your shoulder to make sure you’re doing your job, this is not the place for you. So we made the switch to remote work seamlessly.”

Pre-COVID, Howell says they talked about establishing work from home and flexible schedule policies. The pandemic served as the catalyst to make that change. Since early spring of this year, the Flexo office staff has moved to a 50/50 split between in-office and remote work. “We are deep into conversations about what is next for us, but remote work and more flexibility are here permanently,” he said. It’s the four values in action: supporting people, trusting them to be accountable, and keeping tabs on performance.